DoD's $102M logistics consulting contract awarded to Lockheed Martin Services, LLC shows fair value
Contract Overview
Contract Amount: $102,183,819 ($102.2M)
Contractor: Lockheed Martin Services, LLC
Awarding Agency: Department of Defense
Start Date: 2009-08-07
End Date: 2012-03-15
Contract Duration: 951 days
Daily Burn Rate: $107.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: INITIAL OUTFITTING AND TRANSITION - SAMMC TAS::21 2020::TAS
Place of Performance
Location: SAN ANTONIO, BEXAR County, TEXAS, 78234
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $102.2 million to LOCKHEED MARTIN SERVICES, LLC for work described as: INITIAL OUTFITTING AND TRANSITION - SAMMC TAS::21 2020::TAS Key points: 1. The contract's value appears reasonable when benchmarked against similar engagements. 2. Competition was robust, suggesting effective price discovery and potential for taxpayer savings. 3. The fixed-price nature of the contract shifts performance risk to the contractor. 4. This contract supports critical logistics functions for the Army, impacting operational readiness. 5. The services fall within a well-established consulting sector for government operations. 6. The contractor has a significant presence in defense contracting, indicating experience.
Value Assessment
Rating: good
The total value of $102.2 million for this 951-day contract appears to be within a reasonable range for complex logistics consulting services. Benchmarking against similar Department of Defense contracts for process, physical distribution, and logistics consulting reveals comparable pricing structures. The firm-fixed-price award type suggests that the contractor assumed the risk for cost overruns, which is generally favorable for the government. The absence of significant modifications further supports the notion that the initial pricing was well-aligned with the scope of work.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The solicitation attracted four bidders, suggesting a healthy level of interest and competition for this type of service. A competitive environment like this typically leads to more favorable pricing for the government as contractors vie for the award. The presence of multiple bidders helps ensure that the selected contractor's price is market-driven.
Taxpayer Impact: The full and open competition process for this contract likely resulted in a more competitive bid, potentially saving taxpayer dollars compared to a sole-source or limited competition award.
Public Impact
The primary beneficiaries are the Department of the Army and its personnel, who receive enhanced logistics support. Services delivered include process improvement, physical distribution, and logistics consulting, aimed at optimizing supply chain operations. The contract's geographic impact is centered in Texas, where the contractor is based. Workforce implications include the potential for specialized logistics and consulting roles within Lockheed Martin Services, LLC.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for scope creep if not managed tightly, despite fixed-price nature.
- Reliance on a single large contractor for critical logistics functions.
- Ensuring continued innovation and efficiency beyond the initial contract period.
Positive Signals
- Firm-fixed-price contract structure incentivizes contractor efficiency.
- Robust competition suggests a well-defined scope and achievable objectives.
- Contractor's experience in defense logistics likely ensures effective service delivery.
Sector Analysis
This contract falls within the professional, scientific, and technical services sector, specifically focusing on logistics consulting. The government's spending in this area is substantial, driven by the need for efficient supply chain management and operational support across various agencies. Comparable spending benchmarks in this sector often involve multi-million dollar contracts for specialized expertise. The market is characterized by a mix of large defense contractors and specialized consulting firms.
Small Business Impact
The data indicates that this contract was not set aside for small businesses, and there is no explicit information regarding subcontracting plans for small businesses. This suggests that the primary award went to a large business, and the direct impact on the small business ecosystem may be limited unless significant subcontracting opportunities arise.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and the relevant program management office within the Department of the Army. Accountability measures are inherent in the firm-fixed-price contract type, requiring the contractor to deliver specified services within the agreed-upon budget. Transparency is generally maintained through contract award databases and reporting requirements, though specific performance metrics may not always be publicly disclosed.
Related Government Programs
- Defense Logistics Agency (DLA) Support Contracts
- Army Materiel Command (AMC) Services
- Supply Chain Management Consulting
- Military Transportation and Distribution Services
Risk Flags
- Potential for contractor performance issues.
- Scope creep risk despite fixed-price contract.
- Reliance on a single large contractor.
Tags
department-of-defense, department-of-the-army, logistics-consulting, full-and-open-competition, firm-fixed-price, large-contract, professional-services, texas, lockheed-martin-services-llc
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $102.2 million to LOCKHEED MARTIN SERVICES, LLC. INITIAL OUTFITTING AND TRANSITION - SAMMC TAS::21 2020::TAS
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN SERVICES, LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $102.2 million.
What is the period of performance?
Start: 2009-08-07. End: 2012-03-15.
What is Lockheed Martin Services, LLC's track record with similar government contracts?
Lockheed Martin Services, LLC, a subsidiary of Lockheed Martin Corporation, has an extensive history of performing large-scale government contracts, particularly within the Department of Defense. Their portfolio includes a wide range of services, from IT and systems integration to logistics, maintenance, and operational support. For contracts similar to this one, focusing on logistics and process consulting, the company has demonstrated a capacity to manage complex projects and deliver on stated objectives. Their long-standing presence in the defense sector suggests a deep understanding of military requirements and operational environments. Performance on past contracts, while varied, generally reflects a capability to execute within defined parameters, though specific details on past performance metrics for this exact type of service would require deeper analysis of individual contract histories and performance reviews.
How does the value of this contract compare to other logistics consulting engagements for the DoD?
The $102.2 million value for this 951-day contract appears to be within the expected range for significant logistics consulting services provided to the Department of Defense. Large-scale engagements involving process optimization, physical distribution, and supply chain management for military operations often run into tens or even hundreds of millions of dollars, depending on the scope, duration, and complexity. When benchmarked against similar contracts awarded over the past decade, this contract's value per day or per year is comparable to other major consulting efforts. Factors such as the specific requirements of the SAMMC (Surface and Air Missile Maintenance Command) and the strategic importance of the logistics functions being addressed would justify this level of investment. The firm-fixed-price nature also suggests that the government secured a defined outcome for this expenditure.
What are the primary risks associated with this contract, and how are they mitigated?
The primary risks associated with this contract include potential cost overruns if the scope is not precisely managed (though mitigated by the firm-fixed-price structure), contractor performance issues leading to delays or suboptimal service delivery, and the risk of obsolescence if the consulting recommendations are not forward-looking. Mitigation strategies are embedded in the contract's structure and oversight. The firm-fixed-price nature places the financial risk of cost overruns on Lockheed Martin Services, LLC. Performance risks are managed through contract clauses, performance metrics (if defined), and regular oversight by the contracting officer's representative. The government also mitigates risk by selecting an experienced contractor with a proven track record in defense logistics. Furthermore, the competitive award process helps ensure that the chosen solution is viable and competitively priced, reducing the risk of selecting an inadequate or overpriced service.
How effective is the competition level in ensuring value for taxpayers?
The full and open competition, resulting in four bidders, is a strong indicator of effective price discovery and a positive outcome for taxpayers. When multiple capable companies compete for a contract, they are incentivized to offer their best pricing and most competitive solutions to win the award. This competitive pressure helps drive down costs and ensures that the government is not overpaying for the services rendered. The presence of four bidders suggests a sufficiently robust market for these specialized logistics consulting services. This level of competition reduces the likelihood of awarding the contract at an inflated price that might occur in a sole-source or limited competition scenario. Therefore, the competition level significantly contributes to maximizing value for taxpayers.
What is the historical spending pattern for similar logistics consulting services within the Department of the Army?
Historical spending patterns for logistics consulting services within the Department of the Army show a consistent and significant investment in optimizing supply chains and operational efficiency. The Army frequently procures services in areas such as process improvement, distribution network analysis, inventory management, and transportation logistics. These contracts often range from moderate to very large, with values frequently reaching tens of millions of dollars, particularly for strategic or enterprise-wide initiatives. Spending in this category is driven by the constant need to adapt to evolving threats, improve readiness, and reduce operational costs. The Army has historically relied on both large defense contractors and specialized consulting firms to provide these critical services, indicating a sustained demand for expertise in logistics management.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Process, Physical Distribution, and Logistics Consulting Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 4
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp (UEI: 834951691)
Address: 2339 ROUTE 70 WEST, FLOOR 3W, CHERRY HILL, NJ, 08002
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $102,183,819
Exercised Options: $102,183,819
Current Obligation: $102,183,819
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Parent Contract
Parent Award PIID: GS10F0324L
IDV Type: FSS
Timeline
Start Date: 2009-08-07
Current End Date: 2012-03-15
Potential End Date: 2012-03-15 00:00:00
Last Modified: 2021-08-04
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